Category Archives: Compensation

Are Union Wage Differentials in the United States Falling?

Source: Mckinley L. Blackburn, Industrial Relations, Volume 47 Issue 3, July 2008
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From the abstract:
This paper addresses several estimation and specification issues in estimating union wage differentials in the United States over the last two decades. Estimates provide strong evidence of a decline in the differential for women. For men, the differential appears to have declined for a person with overall average characteristics, but not for a male with characteristics of the average unionized male.

The Great Divergence: Real-Wage Growth of All Workers Versus Finance Workers

Source: Andrew Sum and Paulo Tobar with Joseph McLaughlin and Sheila Palma
Challenge, May-June 2008

In case you wondered whether workers in securities firms and investment bankers have fared better than the rest of American workers, the answer is, resoundingly, “Yes.” Andrew Sum and his colleagues here present the most comprehensive evidence so far. It is eye-opening.

Typical full-time wage and salary workers in the United States achieved no increase in their weekly earnings over the 2002-2007 period. They gained no economic ground despite rising labor productivity and increasing aggregate employment opportunities over most of this five-year period. Second, the mean weekly earnings of the nation’s production or nonsupervisory workers rose by only $6 over this five-year period, barely enough to buy a premium six-pack of beer in most states or a grande latte and a scone at Starbucks.

The mean weekly earnings of workers in the nation’s investment banking and securities industries rose by $2,408 between the first quarters of 2002 and 2007, four hundred times higher than the mean weekly earnings gains of the nation’s 110 million frontline workers. The mean weekly earnings (including bonuses) of wage and salary workers in the investment banking and securities industries of Manhattan rose by $8,028 over the 2002 I-2007 I period. This mean weekly wage gain for Wall Street workers was 134 times higher than the mean weekly wage gain for all U.S. wage and salary workers, including executives, and 1,338 times higher than the mean weekly wage gain for all frontline workers in U.S. industries over this five-year period.

The Economic State of Young America

Source: Tamara Draut, Dēmos, Spring 2008

From the press release:
Today’s young adults are feeling the impact of a massive shift in the U.S. economy–changes that are documented in a new data report from Demos and an analysis of public opinion polling by The Center for American Progress.

The Demos report, “The Economic State of Young America,” is a comprehensive databook offering proof that a combination of declining incomes, growing debt, and high costs of education, homeownership and healthcare are conspiring to make this generation the first to not surpass the living standards of their parents.
The Progressive Generation: How Young Adults Think About the Economy
Center for American Progress

The Union Wage Advantage for Low-Wage Workers

Source: John Schmitt, Center for Economic and Policy Research, May 2008

From the summary:
A new report from CEPR shows that union membership increases the wages of all workers, with low-wage workers seeing the largest gains.

This report uses national data from 2003 to 2007 to show that unionization raises the wages of the typical low-wage worker (one in the 10th percentile) by 20.6 percent compared to 13.7 percent for the typical medium wage worker (one in the 50th percentile), 6.1 percent for the typical high-wage worker (one in the 90th percentile). The paper also produces results for the 50 states and the District of Columbia. Throughout the states, a similar pattern holds, with unionization raising the wages of the lowest-wage workers the most.

See also:
Press release

Squeezed: How Costs for Insuring Families are Outpacing Income – A State-By-State Analysis

Source: State Health Access Data Assistance Center, University of Minnesota, April 2008

From the summary:
This article reveals how the cost of family health insurance nationwide is increasing dramatically for employees without anywhere near an equivalent increase in family income. If this trend continues, more workers are likely to become uninsured because of the expense.

Key Findings:

  • The amount workers pay for family coverage nationwide has increased by 30 percent from $8,281 in 2001 to $10,728 in 2005.
  • Employee income has increased by only 3 percent in the same time period.
  • The average cost employers pay for their share of family coverage has increased by 28 percent from $6,360 to $8,143.

Seventy-six percent of insured individuals in the United States receive health insurance from their own or a family member’s employer. It follows that the more employees and employers have to pay for that insurance, the more likely workers are to join the ranks of the uninsured. Risa Lavizzo-Mourey, M.D., M.B.A, president and CEO of the Robert Wood Johnson Foundation stated in a press release, “This study makes plain what every working parent knows–that providing insurance coverage takes a bigger bite from the family budget every year.”

Where Are the Priorities? 2007-08 Report on the Economic Status of the Profession

Source: American Association of University Professors, March-April 2008

For many years now, colleges and universities have attempted to balance competing demands from students, legislators, and society at large. Students are enrolling in record numbers, legislators and employers are demanding greater skill levels from graduates, and higher education is increasingly being called on to do the work of economic development; at the same time, the share of institutional funding provided by state and federal governments continues to decline. Given these competing pressures on institutions, financial decision making has become a matter of determining priorities. In this year’s report, we call into question the apparent priorities demonstrated by trends in relative spending on salaries for faculty, football coaches, and senior administrators and by the shifts in staffing that have reshaped colleges and universities so dramatically over recent decades.

OPM Issues Status Report on Performance-Based Pay Systems in the Federal Government

Source: Office of Personnel Management, December 2007

From press release:
The U.S. Office of Personnel Management (OPM) has released a 2007 status report on performance-based pay systems within the federal government, which currently support over 298,000 federal employees. The report, Alternative Personnel Systems in the Federal Government – A Status Report on Demonstration Projects and Other Performance-Based Pay Systems, includes information based on agency data, evaluations and studies, and it demonstrates performance-based pay systems “work.”

“This report shows performance-based pay systems drive improvements in managing performance, recruiting and retaining quality employees, and achieving results-oriented performance cultures,” said OPM Director Linda M. Springer.

The report also includes profiles of demonstration projects currently operating under OPM authority, as well as independent and executive pay systems where employee pay is linked to performance.

Executive Compensation Reader

Source: U.S. Securities and Exchange Commission

From the press release:
Securities and Exchange Commission Chairman Christopher Cox today launched the first-ever online tool that enables investors to easily and instantly compare what 500 of the largest American companies are paying their top executives. The new database highlights the power of interactive data to transform financial disclosure.

The Executive Compensation Reader – available today on the SEC’s Web site at – builds on the Commission’s new requirements that went into effect earlier this year to dramatically enhance clarity and completeness of executive compensation disclosure.

By tagging the executive compensation figures in XBRL, the computer language of interactive data, the SEC has created a new online tool to help investors more efficiently view Summary Compensation Tables and certain other data in the proxy statements of large companies. Investors can quickly glimpse the total annual pay as well as dollar amounts for salary, bonus, stock, options and company perks. They can instantly compare those executive compensation figures with other companies by sorting according to industry or size.

The SEC’s new Web tool includes information in XBRL for 500 large companies that have filed proxy statements with the Commission. The new tool includes direct links to companies’ proxy statements, including footnotes and the companies’ explanation of their compensation decisions.

Modernizing the Federal Government: Paying for Performance

Source: RAND Corporation

Enhancing the performance of the civil service has been a central objective of the United States since the Civil Service Reform Act of 1978 authorized a performance-based component to federal salary structures. In 2003, the National Commission on the Public Service, also known as the Volcker Commission, recommended that explicit pay-for-performance (PFP) systems be adopted more broadly throughout the federal government. The authors compare several proposals aimed at enhancing the role of PFP in the federal government: a White House proposal (the Working for America Act), which recommends that the entire federal workforce be converted to PFP systems by 2010; and three bills in the 110th Congress. This occasional paper examines the advantages and pitfalls of explicit PFP schemes compared with the largely seniority-based salary system that still covers more than half of federal civil servants. The authors consider why using PFP in the public sector is challenging, what can be learned from the social science literature, recent practical experience, and growing congressional opposition to PFP.

Summary (PDF; 115 KB)
Full Document (PDF; 350 KB)
See also: Policy Insight, Volume 1, Issue 6, December 2007 — Pay for Performance

National Compensation Survey: Occupational Earnings in the United States, 2006

Source: Bureau of Labor Statistics

The National Compensation Survey (NCS) provides comprehensive measures of occupational earnings, compensation cost trends, benefit incidence, and detailed benefit provisions. This bulletin presents estimates of occupational pay for the nation. These national estimates originate from the NCS locality survey data and are weighted to represent the nation as a whole. Data for more than one-half of the 152 individual NCS localities used for national estimates have been previously published.